IP: worth reading Article: Investors May Have Repudiated the Internet, but Consumers Have Not

[Dave Farber <dave () farber net>]

Investors May Have Repudiated the Internet, but Consumers Have Not

July 22, 2002
By AMY HARMON and FELICITY BARRINGER




 

The reorganization of AOL Time Warner last week has been
recounted as a story of Time Warner, the king of
traditional media, reclaiming its rightful throne from the
upstart digital pretender, America Online.

But as old-line media celebrates its return to power and to
vogue, some analysts and executives caution that the
Internet's capacity to change the rules should not be
discounted too quickly. Investors may have repudiated the
Internet, they say, but consumers have not.

"The Internet may not be doing so great on Wall Street, but
it's doing great on Main Street," said Marshall Cohen,
senior vice president for research at America Online. "As
far as the people who are online, they're using it more and
valuing it more." 

For consumers, that may be a good thing. But for media
companies looking to the Internet for profits, it remains a
frustrating reality. The "digital revolution" that many
traditional media executives were convinced would topple
them or make them rich has not materialized.

In part, that is because the Internet has turned out to be
more of a souped-up telephone than a delivery vehicle for
media and entertainment. E-mail messaging is by far the
medium's most popular feature.

But with 61 percent of American adults using the Internet,
up from 46 percent two years ago, analysts and media
executives say the medium is beginning to change consumer
expectations of what mainstream culture should offer.
Consumers who were once content to sit back and absorb what
was beamed at them are demanding more control over how and
when they consume movies, television, newspapers and music.

<snip>

http://www.nytimes.com/2002/07/22/technology/22NET.html?ex=1028324343&ei=1&e
n=c8bb644128018b5d

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